Fourth Quarter 2011 - Revenues of $1.219 billion - Operating Income
of $102 million; Operating Margins of 8.4 percent - Fully-Diluted
Earnings Per Share of $0.42; includes $0.10 per share favorable
adjustment for block closeout and ($0.25) per share related to new
program charges Full-Year 2011 - Revenues of $4.864 billion -
Operating Income of $356 million; Operating Margins of 7.3 percent
- Fully-Diluted Earnings Per Share of $1.35 - Total backlog of
approximately $32 billion Financial Guidance for 2012 WICHITA,
Kan., Feb. 9, 2012 /CNW/ - Spirit AeroSystems Holdings, Inc.
reported fourth quarter and full-year 2011 financial results
reflecting strong revenue growth on higher ship set deliveries and
solid core operating performance. Full-year net income decreased
primarily due to charges recorded on development programs in 2011,
including net pre-tax $50 million, or ($0.25) per share, of forward
loss charges in the fourth quarter. Spirit's fourth quarter 2011
revenues were $1.219 billion, up from $1.071 billion for the same
period of 2010 as the company benefited from higher production
deliveries during the quarter. Table 1. Summary Financial Results
(unaudited) 4th Quarter Twelve Months ($ in millions, except per
share data) 2011 2010 Change 2011 2010 Change Revenues $1,219
$1,071 14% $4,864 $4,172 17% Operating Income $102 $96 7% $356 $357
(0%) Operating Income as a % of Revenues 8.4% 9.0% (60) BPS 7.3%
8.6% (130) BPS Net Income $60 $62 (2%) $192 $219 (12%) Net Income
as a % of Revenues 5.0% 5.8% (80) BPS 4.0% 5.2% (120) BPS Earnings
per Share (Fully Diluted) $0.42 $0.44 (5%) $1.35 $1.55 (13%) Fully
Diluted Weighted Avg Share Count 142.3 141.8 142.3 141.0 Operating
income for the fourth quarter 2011 was $102 million, compared to
$96 million for the same period in 2010, primarily driven by
increased production volumes, partially offset by the charges
recorded on development programs. Net income for the quarter was
$60 million, or $0.42 per fully diluted share, compared to $62
million, or $0.44 per fully diluted share, in the same period of
2010. (Table 1) Revenue for the full-year 2011 increased 17 percent
to $4.864 billion. Operating income for the full-year was $356
million. Full-year net income decreased 12 percent to $192 million,
or $1.35 per fully diluted share, compared to $219 million, or
$1.55 per fully diluted share in 2010. "In 2011 our core businesses
generated strong operating performance while we successfully
executed increased rates across the business. While the year was
challenging for some of our development programs, it also marked
many important milestones including finalizing the go-forward plan
on the 787 program; Boeing's decision to pursue the 737 MAX, where
Spirit will play a significant role; certification and delivery of
the 787 and 747-8 Freighter programs; and progress in the
developmental phase of the A350, G650 and G280 programs," said
President and Chief Executive Officer Jeff Turner. "The global
demand for the current and next generation of large commercial
airplanes is expanding as we continue to execute well in our
established businesses." "We delivered over two-hundred and eighty
end products to our customers in the fourth quarter, representing a
14 percent increase over 2010. Among these was the delivery of our
first production composite panels for the A350 fuselage from our
Kinston, NC facility to our St. Nazaire, France facility where they
were successfully joined in the quarter and recently delivered to
the customer," Turner added. "With the strong long-term global
outlook for commercial aerospace, our unique competitive position
and our strong financial profile, we are well-positioned to
generate long-term value for our shareholders. As we move into
2012, our priorities will be execution, investing in our core
programs, improving profitability, as well as developing,
supporting certification, and transitioning new programs to initial
production," Turner concluded. Spirit's backlog at the end of the
fourth quarter of 2011 increased by over 5 percent to $32 billion
as orders exceeded deliveries. Spirit calculates its backlog based
on contractual prices for products and volumes from the published
firm order backlogs of Airbus and Boeing, along with firm orders
from other customers. Spirit updated its contract profitability
estimates during the fourth quarter of 2011, resulting in a net
pre-tax $21 million, or $0.10 per share, favorable cumulative
catch-up adjustment primarily associated with productivity and
efficiency improvements in the 737 contract block completed in the
fourth quarter of 2011. In comparison, Spirit recognized a net
pre-tax $10 million unfavorable cumulative catch-up adjustment for
the fourth quarter of 2010. Additionally, the company recorded
forward loss charges on the G280 program of an additional pre-tax
($29) million, or ($0.14) per share, driven by the new
manufacturing plan and higher forecasted assembly and supply chain
costs; the 747-8 program of pre-tax ($18) million, or ($0.09) per
share, due to manufacturing cost growth; and the A350 non-recurring
wing program of pre-tax ($3) million, or ($0.02) per share,
associated with engineering change cost growth. Cash flow from
operations was a $128 million source of cash for the fourth quarter
of 2011, compared to a $364 million source of cash for the fourth
quarter of 2010. (Table 2) Table 2. Cash Flow and Liquidity 4th
Quarter Twelve Months ($ in millions) 2011 2010 2011 2010 Cash Flow
from Operations $128 $364 ($48) $125 Purchases of Property, Plant
& Equipment ($86) ($105) ($250) ($288) December 31, December
31, Liquidity 2011 2010 Cash $178 $482 Total Debt $1,201 $1,197
Cash balances at the end of the year were $178 million, down $304
million from a year ago reflecting the increase in inventory
associated with increased production rates and continuing
investments in new programs. At the end of 2011, the company's $650
million revolving credit facility was undrawn. Approximately $20
million of the credit facility is reserved for financial letters of
credit. Debt balances at the end of the fourth quarter were $1.201
billion. The company's credit rating remains unchanged at the end
of the fourth quarter 2011 with a BB rating, stable outlook by
Standard & Poor's and a Ba2 rating, stable outlook by Moody's
Investor Services. Financial Outlook Spirit revenue guidance for
the full-year 2012 is expected to be between $5.2 – $5.4 billion
based on Boeing's 2012 delivery guidance of 585 to 600 aircraft;
expected B787 ship set deliveries; expected Airbus deliveries in
2012 of approximately 570 aircraft; internal Spirit forecasts for
other customer production activities; expected non-production
revenues; and foreign exchange rates consistent with those in 2011.
Fully diluted earnings per share guidance for 2012 is expected to
be between $2.00 - $2.15 per share, reflecting continued growth and
solid execution in core programs and transitioning new programs to
early stages of production. Cash flow from operations, less capital
expenditures, is expected to be greater than $50 million, with
capital expenditures of approximately $250 million. The effective
tax rate for 2012 is forecasted to be between 31 and 32 percent
assuming the U.S. Research Tax Credit is extended. (Table 3) Risk
to our financial guidance includes, among other factors: 787
delivery volumes; higher than forecast non-recurring and recurring
costs on our development programs; mid-range business jet market
risks; and our ability to achieve anticipated productivity and cost
improvements. Table 3. Financial Outlook 2011 Actual 2012 Guidance
Revenues $4.9 billion $5.2 - $5.4 billion Earnings Per Share (Fully
Diluted) $1.35 $2.00 - $2.15 Effective Tax Rate 31.0% 31% - 32%*
Cash Flow from Operations ($48) million $300 million Capital
Expenditures $250 million ~$250 million * Effective tax rate
guidance, among other factors, assumes the benefit attributable to
the extension of the U.S. research tax credit (Assumes ~1.25%
benefit) Cautionary Statement Regarding Forward-Looking Statements
This press release contains "forward-looking statements" that may
involve many risks and uncertainties. Forward-looking statements
reflect our current expectations or forecasts of future events.
Forward-looking statements generally can be identified by the use
of forward-looking terminology such as "may," "will," "should,"
"expect," "anticipate," "intend," "estimate," "believe," "project,"
"continue," "plan," "forecast," or other similar words, or the
negative thereof, unless the context requires otherwise. These
statements reflect management's current views with respect to
future events and are subject to risks and uncertainties, both
known and unknown. Our actual results may vary materially from
those anticipated in forward-looking statements. We caution
investors not to place undue reliance on any forward-looking
statements. Important factors that could cause actual results to
differ materially from those reflected in such forward-looking
statements and that should be considered in evaluating our outlook
include, but are not limited to, the following: our ability to
continue to grow our business and execute our growth strategy,
including the timing, execution and profitability of new programs;
our ability to perform our obligations and manage costs related to
our new commercial and business aircraft development programs and
the related recurring production; margin pressures and the
potential for additional forward-losses on aircraft development
programs; our ability to accommodate, and the cost of
accommodating, announced increases in the build rates of certain
aircraft, including, but not limited to, the Boeing B737, B747,
B767 and B777 programs, and the Airbus A320 and A380 programs; the
effect on business and commercial aircraft demand and build rates
of the following factors: continuing weakness in the global economy
and economic challenges facing commercial airlines, a lack of
business and consumer confidence, and the impact of continuing
instability in global financial and credit markets, including, but
not limited to, any failure to avert a sovereign debt crisis in
Europe; customer cancellations or deferrals as a result of global
economic uncertainty; the success and timely execution of key
milestones such as deliveries of Boeing's new B787 and first
flight, certification and first delivery of Airbus' new A350 XWB
aircraft programs, receipt of necessary regulatory approvals, and
customer adherence to their announced schedules; our ability to
enter into profitable supply arrangements with additional
customers; the ability of all parties to satisfy their performance
requirements under existing supply contracts with Boeing and
Airbus, our two major customers, and other customers and the risk
of nonpayment by such customers; any adverse impact on Boeing's and
Airbus' production of aircraft resulting from cancellations,
deferrals or reduced orders by their customers or from labor
disputes or acts of terrorism; any adverse impact on the demand for
air travel or our operations from the outbreak of diseases or
epidemic or pandemic outbreaks; returns on pension plan assets and
impact of future discount rate changes on pension obligations; our
ability to borrow additional funds or refinance debt; competition
from original equipment manufacturers and other aerostructures
suppliers; the effect of governmental laws, such as U.S. export
control laws and U.S. and foreign anti-bribery laws such as the
Foreign Corrupt Practices Act and United Kingdom Bribery Act,
environmental laws and agency regulations, both in the U.S. and
abroad; the cost and availability of raw materials and purchased
components; our ability to successfully extend or renegotiate our
primary collective bargaining contracts with our labor unions; our
ability to recruit and retain highly skilled employees and our
relationships with the unions representing many of our employees;
spending by the U.S. and other governments on defense; the
possibility that our cash flows and borrowing facilities may not be
adequate for our additional capital needs or for payment of
interest on and principal of our indebtedness; our exposure under
our existing senior secured revolving credit facility to higher
interest payments should interest rates increase substantially; the
effectiveness of our interest rate and foreign currency hedging
programs; the outcome or impact of ongoing or future litigation,
claims and regulatory actions; and our exposure to potential
product liability and warranty claims. These factors are not
exhaustive and it is not possible for us to predict all factors
that could cause actual results to differ materially from those
reflected in our forward-looking statements. These factors speak
only as of the date hereof, and new factors may emerge or changes
to the foregoing factors may occur that could impact our business.
As with any projection or forecast, these statements are inherently
susceptible to uncertainty and changes in circumstances. Except to
the extent required by law, we undertake no obligation to, and
expressly disclaim any obligation to, publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. You should review carefully the
sections captioned "Risk Factors" in our 2010 Form 10-K filed
February 22, 2011 for a more complete discussion of these and other
factors that may affect our business. Appendix Segment Results
Fuselage Systems Fuselage Systems segment revenues for the fourth
quarter of 2011 were $582 million, up 12 percent from the same
period last year, primarily driven by increased production volumes.
Operating margin for the fourth quarter of 2011 was 16.6 percent as
compared to 13.1 percent during the same period of 2010. In the
fourth quarter of 2011 the segment realized a favorable pre-tax $17
million cumulative catch-up adjustment primarily associated with
productivity and efficiency improvements in the 737 contract block
completed in the fourth quarter of 2011. Additionally, the segment
recorded a pre-tax ($12) million forward loss on the 747-8 program
due to manufacturing cost growth. Propulsion Systems Propulsion
Systems segment revenues for the fourth quarter of 2011 were $322
million, up 22 percent from the same period last year, largely
driven by increased production volumes. Operating margin for the
fourth quarter of 2011 was 16.3 percent as compared to 15.2 percent
in the fourth quarter of 2010. In the fourth quarter of 2011 the
segment realized a favorable pre-tax $6 million cumulative catch-up
adjustment primarily associated with productivity and efficiency
improvements in the 737 contract block completed in the fourth
quarter of 2011. Wing Systems Wing Systems segment revenues for the
fourth quarter of 2011 were $314 million, up 9 percent from the
same period last year, primarily driven by increased production
volumes. Operating margin for the fourth quarter of 2011 was (2.6)
percent as compared to 9.7 percent during the same period of 2010.
In the fourth quarter of 2011 the segment recorded an unfavorable
net pre-tax ($2) million cumulative catch-up adjustment.
Additionally, the segment recorded a pre-tax ($29) million
additional forward loss on the G280 program driven by the new
manufacturing plan and higher forecasted assembly and supply chain
costs, a pre-tax ($6) million forward loss on the 747-8 program due
to manufacturing cost growth, and a pre-tax ($3) million forward
loss on the A350 non-recurring wing program associated with
engineering change cost growth. Table 4. Segment Reporting
(unaudited) (unaudited) 4th Quarter Twelve Months ($ in millions)
2011 2010 Change 2011 2010 Change Segment Revenues Fuselage Systems
$582.3 $519.1 12.2% $2,425.0 $2,035.1 19.2% Propulsion Systems
$321.7 $262.8 22.4% $1,221.5 $1,061.8 15.0% Wing Systems $313.6
$287.7 9.0% $1,207.8 $1,067.4 13.2% All Other $1.3 $1.5 $9.5 $8.1
Total Segment Revenues $1,218.9 $1,071.1 13.8% $4,863.8 $4,172.4
16.6% Segment Earnings from Operations Fuselage Systems $96.8 $67.9
42.6% $318.5 $292.3 9.0% Propulsion Systems $52.3 $39.9 31.1%
$194.1 $137.5 41.2% Wing Systems ($8.3) $27.9 (129.7%) $0.5 $101.0
(99.5%) All Other ($0.5) $0.5 $1.3 ($1.8) Total Segment Operating
Earnings $140.3 $136.2 3.0% $514.4 $529.0 (2.8%) Unallocated
Corporate SG&A Expense ($37.7) ($35.6) 5.9% ($145.5) ($139.7)
4.2% Unallocated Research & Development Expense ($0.2) ($1.4)
(85.7%) ($1.9) ($3.6) (47.2%) Unallocated Cost of Sales $0.0 ($3.3)
(100.0%) ($10.9) ($28.7) (62.0%) Total Earnings from Operations
$102.4 $95.9 6.8% $356.1 $357.0 (0.3%) Segment Operating Earnings
as % of Revenues Fuselage Systems 16.6% 13.1% 350 BPS 13.1% 14.4%
(130) BPS Propulsion Systems 16.3% 15.2% 110 BPS 15.9% 12.9% 300
BPS Wing Systems (2.6%) 9.7% (1,230) BPS 0.0% 9.5% (950) BPS All
Other (38.5%) 33.3% 13.7% (22.2%) Total Segment Operating Earnings
as % of Revenues 11.5% 12.7% (120) BPS 10.6% 12.7% (210) BPS Total
Operating Earnings as % of Revenues 8.4% 9.0% (60) BPS 7.3% 8.6%
(130) BPS Spirit Ship Set Deliveries (One Ship Set equals One
Aircraft) 2010 Spirit AeroSystems Deliveries 1st Qtr 2nd Qtr 3rd
Qtr 4th Qtr Total 2010 B737 94 96 93 89 372 B747 3 1 2 4 10 B767 3
4 3 5 15 B777 21 18 14 14 67 B787 5 4 4 3 16 Total 126 123 116 115
480 A320 Family 102 95 75 96 368 A330/340 25 23 5 19 72 A380 1 5 7
5 18 Total 128 123 87 120 458 Business/Regional Jet* 6 7 7 11 31
Total Spirit 260 253 210 246 969 2011 Spirit AeroSystems Deliveries
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total 2011 B737 93 97 95 92 377
B747 4 3 4 6 17 B767 5 6 6 6 23 B777 16 22 21 19 78 B787 6 7 5 7 25
Total 124 135 131 130 520 A320 Family 103 91 103 106 403 A330/340
18 26 24 25 93 A380 6 5 7 6 24 Total 127 122 134 137 520
Business/Regional Jet 10 13 12 14 49 Total Spirit 261 270 277 281
1,089 * Previously included Hawker-Beechcraft products only. Now
includes Spirit deliveries associated with business and regional
jets. Spirit AeroSystems Holdings, Inc. Condensed Consolidated
Statements of Operations (unaudited) For the Three Months Ended For
the Twelve Months Ended December December 31, December 31, December
31, 31, 2011 2010 2011 2010 ($ in millions, except per share data)
Net revenues $ 1,218.9 $ 1,071.1 $ 4,863.8 $ 4,172.4 Operating
costs and expenses: Cost of sales 1,066.5 918.7 4,312.1 3,607.9
Selling, general and administrative 41.4 40.1 159.9 156.0 Research
and development 8.6 16.4 35.7 51.5 Total operating costs and
expenses 1,116.5 975.2 4,507.7 3,815.4 Operating income 102.4 95.9
356.1 357.0 Interest expense and financing fee amortization (15.9)
(18.5) (77.5) (59.1) Interest income 0.1 0.1 0.3 0.3 Other income
(expense), net 1.4 (0.1) 1.4 (0.4) Income before income taxes and
equity in net loss of affiliate 88.0 77.4 280.3 297.8 Income tax
provision (27.3) (15.4) (86.9) (78.2) Income before equity in net
loss of affiliate 60.7 62.0 193.4 219.6 Equity in net loss of
affiliate (0.3) (0.1) (1.0) (0.7) Net income $ 60.4 $ 61.9 $ 192.4
$ 218.9 Earnings per share Basic $ 0.43 $ 0.44 $ 1.36 $ 1.56 Shares
139.4 138.4 139.2 137.9 Diluted $ 0.42 $ 0.44 $ 1.35 $ 1.55 Shares
142.3 141.8 142.3 141.0 Spirit AeroSystems Holdings, Inc. Condensed
Consolidated Balance Sheets (unaudited) December 31, 2011 December
31, 2010 ($ in millions) Current assets Cash and cash equivalents $
177.8 $ 481.6 Accounts receivable, net 267.2 200.2 Inventory, net
2,630.9 2,507.9 Other current assets 79.9 105.0 Total current
assets 3,155.8 3,294.7 Property, plant and equipment, net 1,615.7
1,470.0 Pension assets 118.8 172.4 Other assets 152.1 164.9 Total
assets $ 5,042.4 $ 5,102.0 Current liabilities Accounts payable $
559.4 $ 443.5 Accrued expenses 224.3 219.6 Current portion of
long-term debt 48.9 9.5 Advance payments, short-term 8.8 169.4
Deferred revenue, short-term 28.5 302.6 Other current liabilities
43.6 19.5 Total current liabilities 913.5 1,164.1 Long-term debt
1,152.0 1,187.3 Advance payments, long-term 655.9 655.2 Deferred
revenue and other deferred credits 34.7 29.0 Pension/OPEB
obligation 84.2 72.5 Other liabilities 237.4 183.0 Equity Preferred
stock, par value $0.01, 10,000,000 shares authorized, no shares
issued - - Common stock, Class A par value $0.01, 200,000,000
shares authorized, 118,560,926 and 107,201,314 issued, respectively
1.2 1.1 Common stock, Class B par value $0.01, 150,000,000 shares
authorized, 24,304,717 and 34,897,388 shares issued, respectively
0.2 0.3 Additional paid-in capital 995.9 983.6 Accumulated other
comprehensive loss (126.2) (75.3) Retained earnings 1,093.1 900.7
Total shareholders’ equity 1,964.2 1,810.4 Noncontrolling interest
0.5 0.5 Total equity 1,964.7 1,810.9 Total liabilities and equity $
5,042.4 $ 5,102.0 Spirit AeroSystems Holdings, Inc. Condensed
Consolidated Statements of Cash Flows (unaudited) For the Twelve
Months Ended December 31, 2011 December 31, 2010 ($ in millions)
Operating activities Net income $ 192.4 $ 218.9 Adjustments to
reconcile net income to net cash (used in) operating activities
Depreciation expense 129.2 115.3 Amortization expense 10.5 12.7
Employee stock compensation expense 11.2 28.8 Bad debt expense 1.4
- Excess tax benefits from share-based payment arrangements (1.3)
(5.0) Loss on disposition of assets 1.0 0.7 Loss from foreign
currency transactions 1.0 4.8 Deferred taxes 21.6 48.5 Long-term
tax (benefit) provision (6.1) (9.7) Pension and other
post-retirement benefits, net (9.6) (8.9) Grant income (5.4) (3.1)
Equity in net loss of affiliate 1.0 0.7 Changes in assets and
liabilities Accounts receivable (66.3) (41.6) Inventory, net
(121.6) (300.3) Accounts payable and accrued liabilities 100.2 26.9
Advance payments (159.9) (140.3) Deferred revenue and other
deferred credits (265.9) 181.8 Other 118.9 (5.1) Net cash (used in)
operating activities (47.7) 125.1 Investing activities Purchase of
property, plant and equipment (249.7) (288.1) Other 0.5 (0.3) Net
cash (used in) investing activities (249.2) (288.4) Financing
activities Proceeds from revolving credit facility 30.0 150.0
Payments on revolving credit facility (30.0) (150.0) Proceeds from
issuance of bonds 300.0 Principal payments of debt (8.0) (9.6) Debt
issuance and financing costs 0.4 (18.0) Excess tax benefits from
share-based payment arrangements 1.3 5.0 Net cash (used in)
provided by financing activities (6.3) 277.4 Effect of exchange
rate changes on cash and cash equivalents (0.6) (1.5) Net decrease
in cash and cash equivalents for the period (303.8) 112.6 Cash and
cash equivalents, beginning of the period 481.6 369.0 Cash and cash
equivalents, end of the period $ 177.8 $ 481.6 On the web:
http://www.spiritaero.com SOURCE Spirit AeroSystems Holdings, Inc.
Spirit AeroSystems Holdings, Inc. CONTACT: Investor Relations,
Coleen Tabor, +1-316-523-7040, or Media, KenEvans,+1-316-523-4070,
both of Spirit AeroSystems Holdings, Inc.http://www.spiritaero.com
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